Council approves 2025-2026 budget, 5.6 per cent property tax increase each year

Medicine Hat – Medicine Hat City Council approved the 2025-2026 budget Monday night that includes a 5.6 per cent property tax increase in 2025 and another 5.6 per cent in 2026.

Based on the 2024 average assessed value of residential properties ($315,000 for a single-family home), Medicine Hat homeowners can expect a municipal increase of approximately $10 per month in 2025 and again in 2026.

Residential utility customers will see a one per cent increase in utility rates, while commercial rates go up five per cent and industrial customers increase by four per cent. Medicine Hat’s 2025 utility rates for the average residential customer remain $768 per year lower than the average current 2024 rates of other Alberta cities.

The budget is one of the City of Medicine Hat’s primary financial planning tools for aligning strategy with appropriate financial resources. It is a key accountability tool for ensuring the City’s financial resources are being spent in alignment to the strategic vision of Council.

The City of Medicine Hat’s 2025-2026 budget reflects administration’s commitment to sustained prosperity and well-being of this community, including competitive taxes and utility charges, while ensuring fiscal capacity and flexibility to address the challenges and opportunities that lie ahead. This focus of balancing the needs of today with the requirements of tomorrow became the theme of this budget development process.

“Today, the municipality is facing revenue pressures due to a historic budget gap, foregone property tax revenue during the pandemic, reduced fine revenues and development fees, and declining investment revenues. For tomorrow, we must prudently safeguard our resources to maintain infrastructure and services, face energy transition, meet our abandonment obligations, and grow for the future,” said Corporate Services Managing Director and Chief Financial Officer, Dennis Egert. “We worked diligently to present a responsible budget that maintains service levels in the midst of rising costs, while investing in the services and infrastructure our residents depend on.”

Budget presentations to City Council began in April and continued throughout 2024.

“Council wanted the budget process to be as transparent as possible. We hope that walking through its development at open public meetings has led to greater understanding both for City Council and community members,” adds Egert.

The historic level of earnings experienced by the City’s Energy Business over the past few years are not anticipated to continue into 2025-2026. The approved budget sets the City on a path to close the municipal budget gap without reliance on energy dividends by 2028.

The budget includes $449.5 million for operating expenses and $99.4 million for capital projects in 2025. In 2026, the operating expense budget is $460 million and the capital spend is $112.9 million.

Highlights of the budget include the following:

• $19.3 million in growth capital
• $10 million in new operating initiatives
• $193 million in sustaining our existing infrastructure
• Zero per cent inflation increases to non-salary costs for all departments but for unavoidable cost pressures
• 5.6 per cent property tax increase in 2025 and in 2026
• $10 million withdrawal from Medicine Hat Endowment Fund (over two years) to support Council’s Strategic Plan and reduce the Municipal Budget Gap
• 2025 utility rates that are lower than the 2024 rates of other Alberta cities

For a full breakdown of the City’s budget, visit medicinehat.ca/budget.

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